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The appeal of bitcoin and other cryptocurrencies is that they are “successful as a speculative asset.” This was stated by the former Chairman of the US Federal Reserve System (FRS) Ben Bernanke.
“I don’t think that #Bitcoin is going to take over as an alternative form of money,” says @BenBernanke. pic.twitter.com/yl9gs6VZKX
— Squawk Box (@SquawkCNBC) May 16, 2022
According to him, digital assets “were conceived as a substitute for fiat, but did not succeed in this.”
“If bitcoin were an alternative to paper money, you could use it to buy products. No one buys products with bitcoins, because it is too expensive and inconvenient, “Bernanke said.
The former official also criticized the comparison of the first cryptocurrency with gold. He pointed out that the precious metal “has basic value to use,” whereas in the case of bitcoin, it’s “creating ransomware or something like that.”
“One of the risks associated with bitcoin is that it could be subject to much more regulation, and I think anonymity is also at risk,” the economist suggested.
Bernanke headed the Fed from 2006 to 2014. In this position, he advocated the planning of inflation by issuing a dollar.
After public service, the economist joined Kenneth Griffin’s Citadel hedge fund as an advisor. In 2022, the latter recognized his skepticism about digital assets as erroneous and announced the company’s entry into the cryptocurrency market as a liquidity provider.
Earlier, the former head of the Fed took a more favorable position towards bitcoin, according to a letter to the US Congress from November 2013. Bernanke then stated that cryptocurrencies “can have long-term prospects, especially if innovations contribute to the creation of a faster, safer and more efficient payment system.”
In May 2022, billionaire Ray Dalio called bitcoin a good insurance against inflation, but not a full-fledged alternative to gold.
Recall, analysts at Bank of America pointed to the increased relationship between the first cryptocurrency and the stock market, unlike the precious metal.
#Exhead #Fed #doubted #prospects #bitcoin #alternative #fiat
